Bruce Hershenson traded stock options on the floor of the Philadelphia Stock Exchange for seven years. The market was doing fairly well during most of the ‘80s and he was able to prosper in this business, but in 1989 he left that business in search of more stability after the stock market decline in 1987.
After careful research, in 1990 he leaped into the vintage collectible movie poster business. He is now the President of eMoviePoster.com, a company that he points out has sold more vintage movie posters than anyone else in the world. While he may have switched careers, he has nonetheless followed with a watchful eye the activities of the market since he left the trading floor. His observations have led him to some stark comparisons between the stock market today and in the past, the value of the dollar, and the investment potential of vintage pop culture collectibles.
With financial events dominating the news and even the Presidential debates, the economy in general and many forms of investments are not doing as well as they were this same time last year, or even two months ago. Hershenson witnessed first hand a similar instance when a 22% drop occurred in the stock market in 1987. The hit that the market took 21 years ago was a brief devastation he said, and the market began to rise the next day. He recalled people bouncing back and gaining trust in the market again in about four to six months.
He likened the present situation in some ways to 1987, but this time it’s worse because of the intense volatility. The ebb and flow of the stock market is moving at such a frantic pace and that makes him concerned that it will take much longer for the average person to once again, feel comfortable with investments in stocks.
In order to improve the economy the government has passed a bill, an $850 billion bailout package for financial institutions. While this may eventually help pull back the economy to where it was, the road will not be easy and there are numerous pitfalls ahead. Chief among the dangers is not understanding the scope of what’s happening, he said.
The swirling and often contradictory news coming out of the financial markets has been confusing, further promoting an air of uncertainty. While the Federal Deposit Insurance Company (FDIC), has remained financially sound and guarantees funds in member institutions, many people have moved to withdraw their cash from banks anyway.
Because cash is tangible, many of those individuals feel a certain degree of safety following the traditional post-Great Depression decision to put it under their mattresses.
The tangible sensation of paper money, however, should not be confused with its value. The United States left the Gold Standard in 1933 and the Silver Standard in 1965, so now paper money is backed only by the notion that the government would in theory be able to back its presumed worth. Since the Treasury will print 9 billion notes of varying denominations this year and will not take a similar number of bills out of circulation, the supply of money will continue to increase. In addition, the dollar itself has been traded for years as a commodity, increasing its volatility.
“When we make more dollars and it goes down in value and then we continue to print more, there is a significant opportunity for inflation,” Hershenson said. The value of the dollar against other currencies can affect how values in other fields are perceived. This is also true of collectibles, where the relatively low value of the dollar has been a boon for international collectors.
In one instance he recalled selling a painting to a British buyer two years ago. That buyer mentioned that he paid 50% more now (in American dollars) than he sold the same piece for ten years ago and was actually paying less in British pounds then than he had previously because of the difference in the value of the American dollar. From the American side it might have seemed that he paid a large amount, but from the British side it was viewed as more of a bargain. Because foreign buyers comprise 40% of eMoviePoster.com’s business, Hershenson said he is reminded continuously of the decrease in the value of our dollar.
He has noticed that people are beginning to search for more solid investments, and that they are looking for something that will hold its value regardless of our dollar’s performance. “Someone who sits with money in a mattress could do poorly because the value of the dollar continues to fall quite a bit. You still technically have the same amount of money, but you can’t buy nearly as much with it. If you invest in a high-grade vintage pop culture collectibles or another solid performer, in many cases you would have a higher value."
The reliability of collectibles, he said, is one reason to give them serious consideration. While there have been years when they did not appreciate in value, he could think of no instance in which a rare, high grade, vintage pop culture artifact lost a major portion of its value. Instead, most items see slow, steady growth over protracted periods. This stability is something many may find appealing in light of the real estate and stock markets.
“Years ago when the stock market fluctuated it was a minimal increase or decrease; now it fluctuates everyday and it’s become more risky. I see more appeal with investments such as vintage collectibles because they are less volatile than the stock market. If you buy some great collectible, it has a great chance of increasing in value whereas the stock market could easily go either way,” he said.
Since he began his career in movie poster auctions, he has sold $37 million worth of vintage posters. He said classic titles such as Casablanca, Wizard of Oz, King Kong, and others have always been big collector’s items, and that such classic Hollywood names as Harlow and Gable will most likely continue to sustain their popularity regardless of the age of the collector.
He said some things in the business have changed drastically since he got his start in the field. Back in 1990, he would get a call at least once a month from people tearing down old 1930s and ’40s houses and finding hundreds or even thousands of movie posters. In the early 1900s, well before the use of modern fiberglass, some people would use leftover movie posters or other items as insulation in the walls of their houses. As these buildings were being torn down, collectibles literally came out of the woodwork. These calls have become increasingly rare in the past seven or eight years as finds of this nature have all but dried up.
Because the high end rare posters are hard to find, Hershenson said he does most of his business in movie posters affordable to most collectors. This market gets its original impulse largely from nostalgia and is sustained by demand in some cases correlating with the age of the collectors. Such enthusiasts tend to show interest in those movies and characters that were popular during their own childhoods, he said, and thus, among the most popular posters right now are James Bond, the Beatles, and Clint Eastwood spaghetti westerns.
One example that Hershenson recalls regarding the value increase of movie posters is a vintage poster from the 1934 film, The Girl from Missouri starring Jean Harlow. He originally sold the poster for $7,000 in 1993 and has recently reacquired the collectible and sold it for a notable price of $18,100. While superior prices such as this are a thrilling rarity the heart of what he sells day in and day out is in the highly accessible $50 to $250 price range so it is still an affordable investment for most collectors. These are the items that many see as the subject of increasing demand over the next few years. Regardless of how much one spends, in almost all instances vintage collectibles have sustained their value and have a track record of turning a profit.
In times of uncertainty, he said, there is additional value in being able to hold, touch and see one’s investments. Collectibles are not only tangible, they are often something that instills emotional comfort, where even in the best of times other types of holdings can be largely theoretical. “It’s great to have insight from someone who has been on both sides of these investment opportunities,” said John K. Snyder, Jr., President of Geppi’s Entertainment Publishing & Auctions said of Hershenson’s comments. “It’s a genuine eye-opener to those who have yet to entertain the option of vintage collectibles as an investment.”
The steady upward track of the collectibles market remains driven by supply and demand. As the population has increased, demand for vintage pop culture collectibles has not slackened, but the supply of many pieces has dried up, as Hershenson pointed out. The market for collectibles may lack the big bangs of mesmerizing profits and skyrocketing housing prices, but it also does without the loss of $2 trillion in retirement investments and resounding crashes.
“When you go out and play a round of golf, that’s it; whatever money you spend is gone. When you buy a vintage collectible you have a wonderful chance of getting that money back but you also have the opportunity to really enjoy it in the meantime, so it’s a much more positive hobby in the financial sense, Hershenson said.